Question
Obviously any financial investment has risk associated with it. A primary component of risk is the uncertainty associated with the magnitude of potential net returns.
Obviously any financial investment has risk associated with it. A primary component of risk is the uncertainty associated with the magnitude of potential net returns.
Select a publicly traded firm that you consider is "high risk" and another that you believe would be "low risk". Using online resources, locate the beta of those two different publicly traded firms.
Analyze the actual betas that you looked up and comment on the relative risks of the two firms you investigated. As part of your analysis, be sure to compare each firm to the "market" risk. In addition, what risk factors other than the measure of beta would you consider appropriate to each of the securities given their market sector, past performance, and a composite of expert opinion on buy/sell ratings.
Lastly, in terms of beta, what components of risk are defined as systematic risk? Unsystematic risk? Explain in your summary.
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